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Strengthening Capacity for Private Sector and SME Development and the Alternative Livelihood for Upland Ethnic Groups in Houaphanh Province

Remarks by
Gil-Hong Kim
Country Director,
Lao PDR Resident Mission
Asian Development Bank

At the Signing Ceremony of the Japan Special Fund Technical Assistance

9 April 2008
Lao PDR

Thank you:

Excellency Mme. Viengthong Siphandone, Vice Minister, Ministry of Finance; Excellency Mme. Khemmani Pholsena Vice Minister, Ministry of Industry and Commerce; Excellency Mr. Tamla Amkhathongkham, Vice Governor of Houaphanh Province; Mr. Masaaki MIYASHITA, Ambassador of Japan to Lao PDR; Distinguished Guests and Colleagues:

Before I share a few words on the signing of the two technical assistance projects I would like to first acknowledge the presence and to extend a special welcome to Ambassador MIYASHITA San for Japan’s continued collaboration with ADB to support Lao PDR.

Today we will sign 2 TA grant projects. One for Strengthening Private Sector and SME Development funded under the Japan Special Fund of the Government of Japan and the other is the Alternative Livelihood for Upland Ethnic Groups in Houaphanh Province, funded by the Japan Fund for Poverty Reduction.

With regard to the Private Sector and SME Development TA, I would like to note that the Government has made remarkable progress business climate reforms to stimulate private sector growth. The enterprise registration process has been streamlined. It has also improved transparency in the business climate by introducing a negative list for enterprise registration. Government’s efforts to access to WTO is accelerating its momentum for reforms to trade policy and the business climate.

However, the private sector especially SME is under developed. To fully the explore private sector development potential, there is a need to policy framework. Successfully implement current reforms to the investment climate, successfully finish the trade reforms and continued investments in infrastructure and the logistics sector.

The project has 2 main objectives. First, to support the Government to implement private sector and SME development policy agenda detailed in the second subprogram of the ADB’s Private Sector Development Program. Second, to strengthen the executing agency and implementing agencies capacity to formulate policy.

The TA activities would include upgrading the provincial Enterprise Registry Offices and linking them with the central office to ensure timely registration and sharing of information; carrying out a red tape review; developing tools to assess AFTA and preparing for WTO accession; and reforming the import management system and trade facilitation. The TA also includes outreach activities with key research institutes including the National Economic Research Institute and the National University of Lao PDR, and with the Lao Business Forum.

Today we will also sign the Alternative Livelihood for Upland Ethnic Groups in Houaphanh Province project, funded by the Japan Fund for Poverty Reduction.

The project is aimed at poverty reduction for ethnic groups in 31 villages of Xamneua and Xamtai districts in Houaphanh province. The intended outcomes of the project are Stabilization of unsustainable shifting cultivation practices and elimination of opium production and consumption in Houaphanh Province by improving livelihoods of shifting cultivators and former opium growers/addicts through alternative livelihoods and sustainable development.

The project will support greater community participation in decision making and management; support construction of rural infrastructures; and strengthen capacity of Government extension services in support of livelihood development activities. The Project will be implemented in parallel with a project funded by the United Nations Office on Drug and Crime (UNODC), which will address the drug-related issues in the same 31 target villages.

To ensure two projects will fully deliver results on the ground, ADB will closely collaborate the government including of Japan and the European Commission with development partners.

With this remark, let me express our thanks to the Government of Japan for its support, and I wish the Implementing Agencies of the tow projects success in their implementation. By use this opportunity, I also wish all a happy Pi-Mai Lao PDR.

Kop Chai Lai Lai.